Are Electric Vehicle Insurance Policies Cheaper or More Expensive?

There has been a rise in the popularity of electric vehicles (EVs) in India. This surely raises questions in the minds of many as to how insurance costs for EVs compare with petroleum-fueled cars. 

Third-party Insurance: The IRDAI has given discounts of 15% on third-party insurance premiums for EVs, in a bid to promote green transport. In particular, an EV with a power of up to 30 kW has a third-party premium of around ?1,761, while a similar fuel-based car has its premium rate come to around ?2,072. 

Comprehensive Insurance: Comprehensive insurance, covering more risks, translates into an expensive domain of insuring an EV owing to the high price of parts such as batteries and advanced technology. Repairs often require specialized personnel who charge steeply. And thus the overall premium for an EV insurance will be on the higher end, substantiating the claim of being more expensive than a gas-based car. 

Growing Demand: Interest in EV insurance has increased lately. Reports indicate that demand for EV insurance grew 16 times over three years, with Delhi-NCR leading with an 18.3% market share. This trend suggests the adoption of EVs is becoming widespread, with more people seeking suitable insurance coverage. 

Conclusion: While the whole cost of third-party insurance is reduced due to an IRDAI-imposed concession, comprehensive insurance, on the other hand, tends to be at the higher end, owing to the higher costs of repairs and components. With further advancements in EV technology and a probable increase in volumes, insurance might be up for reassessment. At this point, however, EV owners are encouraged to compare insurance policies, basing their choice on coverage.